Upgrades broaden horizons for Uruguay

Jun 2, 2014

South American country’s credit rating climb is widening the field of potential investors, says public credit head Azucena Arbeleche

Source: LatinFinance

Moody’s upgrade of Uruguay to
Baa2, two years after the country regained investment grade
status, opens the way for the country to further diversify its
investor base, the head of public credit told
LatinFinance.

Moody’s praised Uruguay for
improving its fiscal and debt metrics, for more stable
— albeit lower — growth levels, and for
consolidating its sovereign credit profile when it announced
the one-notch upgrade last week.

"The upgrade allows us to press ahead with
efforts to reach different types of investors, to further
diversify our investor base," Azucena Arbeleche told
LatinFinance on Friday.

"This improvement in the rating for
Uruguay is a confirmation of the efforts the country has
systematically been doing, which allowed us to recover
investment grade status in April 2012," she said.

Standard and Poor’s was the
first agency to raise Uruguay to investment grade.
Moody’s followed suit in August 2012, and Fitch in
March 2013.

"Despite the uncertainty and the risks in
capital markets, Uruguay’s fundamentals have
improved and that shows in the rating and also in the prices
its bonds have in the market," Arbeleche said.

Uruguay's efforts to reduce exposure to
regional shocks and its diversification of its commodity base
— which could boost the country’s
resilience to external volatility — were also cited by
Moody’s. Arbeleche recently described
Uruguay’s push for long-term liquidity as
an expensive insurance policy, but one "worth having".

Uruguay has no concrete plans to tap the
international bond markets this year, but that the country is
always monitoring market conditions in case a window opens, she
said on Friday.